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MND NewsWire features plain and simple interpretations of industry related data and events written in a manner that maintains the interest of random readers while still catering to the perspective of a housing market professional.

Despite a poor showing in December, existing home
sales in 2017 were the best levels in 11 years. The National Association of Realtors® (NAR) said the finished
with 5.51 million sales of existing single-family homes, townhomes, condos, and
cooperative apartments. This edged out, by 1.1 percent, the 5.45 million sales
in 2016 to have the highest number of transaction since 6.48 million were sold
in 2006.

In December,
however home sales declined by 3.6 percent to a seasonally adjusted annual rate
of 5.57 million and were 1.1 percent higher on an annual basis. November sales were revised down from 5.81
million to 5.78 million.

Many analysts
had expected a decline in December, although not one so large. Estimates from those polled by Econoday
ranged from 5.50 million to 5.90 million units, with a consensus of 5.75
million.

Single-family home sales dropped by 2.6
percent to a seasonally adjusted annual rate of 4.96 million from 5.09 million
in November but remain above the 4.91 million pace of a year ago. Existing
condominium and co-op sales fell 11.6 percent to a seasonally adjusted annual
rate of 610,000 units in December and are up 1.7 percent on an annual basis.

Lawrence Yun,
NAR chief economist, says the housing market performed remarkably well for the
U.S. economy in 2017, but wasn't as good as it might have been. The year brought substantial wealth gains for
homeowners and historically low distressed property sales. "Existing sales
concluded the year on a softer note, but they were guided higher these last 12
months by a multi-year streak of exceptional job growth, which ignited buyer
demand," he said. "At the same time, market conditions were far from perfect.
New listings struggled to keep up with what was sold very quickly, and buying
became less affordable in a large swath of the country. These two factors
ultimately muted what should have been a stronger sales pace."

Added Yun, "Closings scaled back in
most areas last month for this same reason. Affordability pressures persisted,
and the pool of interested buyers at the end of the year significantly
outweighed what was available for sale."

The median existing-home price for
all housing types in December was $246,800, a 5.8 percent rate of appreciation
for the year and was the 70th straight month of year-over-year gains.
Last December the median price was $233,300.
The median existing single-family home
price also rose 5.8 percent year-over-year to 248,100. Condos performed even
better with a 6.4 percent annual increase to a median of $236,500.

The inventory of available homes
fell another 11.4 percent in December to 1.48 million, and is now 10.3 percent
lower than a year ago (1.65 million).
The inventory has declined year-over-year for 31 consecutive months and
is currently estimated at a 3.2-month supply, the lowest level since NAR began
tracking in 1999.

"The lack of supply over the past
year has been eye-opening and is why, even with strong job creation pushing
wages higher, home price gains - at 5.8 percent nationally in 2017 - doubled
the pace of income growth and were even swifter in several markets," said Yun.

The share of first-time buyers increased
from 29 percent in November to 32 percent, unchanged from a year ago. Individual investors had a 16 percent share of
sales, up from 14 percent both last month and in December 2016. All cash sales accounted for 20 percent of
transactions in December and averaged 21 percent for the year.

"Rising wages and the expanding
economy should lay the foundation for 2018 being the turning point towards an
uptick in sales to first-time buyers," said Yun. "However, if inventory
conditions fail to improve, higher mortgage rates and prices will further eat
into affordability and prevent many renters from becoming homeowners."

Properties typically stayed on the
market for 40 days, the same as in November, but 12 days shorter than in
December 2016. Forty-four percent of
homes sold in December went under agreement in less than a month.

Distressed sales - foreclosures and
short sales - made up 5 percent of sales in December compared to 4 percent in November.
Four percent of sales were foreclosures and 1 percent were short sales.

NAR President Elizabeth Mendenhall, says
improving the new tax law is a top priority for Realtors® in 2018. "Especially
in high-cost, high-taxed markets, there's still big concern that the overall
structure of the final bill diminishes the tax benefits of homeownership in a
way that would adversely affect home values and sales over time," she said. "As
the housing market adjusts to the new law, Realtors® will be listening to their
clients and communicating to lawmakers ways to ensure owning a home is truly
incentivized in the tax code."

The slide in sales affected all four
of the nation's regions. Sales were down
7.5 percent in the Northeast to an annual rate of 740,000, 2.6 percent below a
year ago. The median price in the region was $261,400, 3.0 percent higher than
in December 2016.

In the Midwest, existing-home sales
dipped 6.3 percent to a rate of 1.33 million, remaining 1.5 percent above a
year ago. The median price rose 7.8 percent to $191,400.

Sales in the South decreased 1.7
percent to an annual rate of 2.30 million, an annual gain of 3.1 percent. The
median price increased by 5.8 percent to $221,200.

There was a 1.6 percent decline in
sales in the West, to 1.20 million units, 0.8 percent fewer than in December
2016. The median price in the West was
$367,400, up 7.3 percent from December 2016.

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